GEC deal set to save 1,200 jobs at Govan shipyard

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AN ELEVENTH-HOUR deal was struck last night which it is hoped will save 1,200 jobs at Govan's Kvaerner shipyard just three days before the first redundancies were scheduled to take place.

GEC Marconi Marine, the shipbuilding arm of GEC Marconi, agreed in principle to buy the yard after 10 hours of talks between the two companies chaired by John Reid, the Secretary of State for Scotland.

It will come as a huge relief to the Government who ordered in a taskforce to save the yard just before May's elections for the Scottish Parliament.

Failure to secure the future of the yard, a rare icon of Scottish heavy industry which survived Thatcherism, would have been politically disastrous for Labour. Govan is in a key Glasgow marginal seat, hard fought by the Scottish National Party. Nationalists would also have seized on Govan's closure as a sign that Labour could save car factories such as the BMW plant in Longbridge, but was not able to do the same for Scotland's troubled industries.

Dr Reid said: "I am delighted that Kvaerner and Marconi have struck a deal which I hope will safeguard the future of the Govan yard."

Further talks are due to take place today, but Dr Reid said he hoped that 241 compulsory redundancy notices would be lifted by the end of the week.

Kvaerner announced earlier this year that it was pulling out of its worldwide shipping interests and was putting the yard up for sale.

GEC and Kvaerner seemed close to a deal last week, but talks broke down over GEC's insistence that Kvaerner should continue to foot the pounds 9m redundancy package should it be necessary to close the yard within five years of purchase. Kvaerner could not accept the terms.

Details of last night's deal were not released, but the Government may have stepped in to underwrite at least part of the redundancy package. It is thought GEC will initially use the yard to complete a Royal Navy contract for two supply vessels and then seek further orders.

The GMB union convener at the yard, Jamie Webster, said he was delighted with the news. "I can't wait to get back in the yard tomorrow," he said. "It's a dream come true, better than winning the lottery."

Donald Dewar, the Scottish First Minister, said: "This is great news for the workforce which have been through a desperately difficult period and hopefully they can now look forward to a brighter future."